A Secure Retirement for Ontario Workers

Made-in-Ontario Pension Plan Means Retirement with Income Security

Thursday, May 22, 2014

Premier Kathleen Wynne was at OMERS’ OneEleven in Toronto today to talk about the Ontario Liberal plan to ensure people can count on a secure income after a lifetime of work.

The Premier was joined by former Prime Minister Paul Martin, former OMERS CEO Michael Nobrega and members of the Technical Advisory Group on Retirement Security, to discuss the Ontario Retirement Pension Plan (ORPP), and what it means for Ontario workers.

Too many middle-class Ontarians have not been able to save adequately for retirement, especially with adult children still at home and parents and grandparents who also need financial support. The Canada Pension Plan is a well-managed program and is guaranteed and predictable; however, the average retiree only receives $6,800 a year in CPP benefits. That simply isn’t enough to cover the basics in life, especially when only 35 per cent of Ontario’s workers have a workplace pension plan.

Despite leaders from across Canada advocating for the federal government to enhance the CPP benefit, the Harper Conservatives unilaterally shut down this discussion in December 2013.

Premier Wynne is showing leadership at this critical time, by proposing the ORPP in the 2014 Liberal Budget to fill in the gap left by the inadequate CPP. Andrea Horwath chose not to support the Budget, risking the income security of Ontario workers. If re-elected, Premier Wynne will re-introduce the Budget.

Tim Hudak and the PCs have proven that they won’t stand up to the Harper Conservatives and has no plans to address the looming pension crisis.

Quote

“People of this province should not find that their reward for a lifetime of hard work is to be faced with financial insecurity the moment they retire. And yet that is a very real possibility for far too many of today’s working Ontarians. Too many people in their 40s and 50s cannot put away enough savings on their own and too many people in their 20s and 30s cannot save at all. We must act now to support their future.”

— Premier Kathleen Wynne

“Confidence is an essential part of a strong economy. For most Ontarians, knowing that your retirement is secure is an essential part of that confidence. The Canada Pension Plan is a legacy worth protecting. And as Premier Wynne is showing it is a legacy worth building on.”

— The Right Honourable Paul Martin, former Prime Minister and Special Advisor to Premier Kathleen Wynne on Retirement Income Security

Quick Facts

The ORPP will come into effect in 2017, and would initially cover 3 million Ontarians.

The ORPP will be professionally administered by an organization at arm’s length to the government with former OMERS CEO Michael Nobrega advising on implementation.

The ORPP will require equal contributions from employers and employees not exceeding 1.9% from each, on earnings up to $90,000.

The ORPP could provide an annual lifetime benefit of up to $25,000 when combined with CPP — potentially doubling the retirement benefit an Ontario retiree would receive under the CPP alone.

In 2012, there was $280-billion in unused Registered Retirement Savings Plan (RRSP) contribution room in Ontario.

Retirement savings experts say that individuals require 50 to 70 per cent of their pre-retirement income to maintain their standard of living in retirement. Many Ontarians are not meeting this target.